LOCAL firms’ payment performance continued to improve for a fourth consecutive quarter in Q2 2024, said the Singapore Commercial Credit Bureau (SCCB) on Tuesday (Jul 2).
The credit and risk information solutions provider noted that both prompt and slow payments accounted for slightly more than two-fifths of total payment transactions.
Prompt payments in the second quarter improved by 0.04 percentage point on the quarter to 41.11 per cent. Year on year (yoy), prompt payments were up by 0.19 percentage point from 40.92 per cent.
Slow payments declined 0.05 percentage point quarter on quarter (qoq) and 0.25 percentage point on the year to 44.07 per cent.
Meanwhile, partial payments inched up 0.01 percentage point qoq and 0.06 percentage point yoy to 14.82 per cent.
By sector, three of five industries – retail, services and wholesale – saw a qoq drop in slow payments in Q2.
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On a yoy basis, the construction, retail, services and wholesale sectors recorded declines in slow payments. Manufacturing was the only industry that registered higher payment delays on the year.
In the construction sector, slow payments rebounded in Q2 after falling for three consecutive quarters. Slow payments rose by 0.04 percentage point qoq, and fell by 0.46 percentage point on the year to 55.24 per cent.
Within the construction industry, the heavy construction sector accounted for the largest increase in payment delays, rising 0.07 percentage point qoq to 54.72 per cent.
Meanwhile, slow payment among manufacturers rose after two straight quarters of decline. Slow payments were up 0.08 percentage point qoq to 39.08 per cent. SCCB attributed the increase in payment delays to general manufacturers and manufacturers of electronics and chemicals.
General manufacturers recorded the largest increase in payment delays, up by 2.5 percentage points to 44.85 per cent in Q2.
This is followed by manufacturers of electronics whose payment delays increased by 0.93 percentage point to 46.08 per cent. Payment delays by chemical products manufacturers edged up 0.2 percentage point to 46.1 per cent.
On the year, slow payments in the manufacturing industry rose 0.1 percentage point.
In the retail sector, payment delays dropped 0.11 percentage point qoq and 0.2 percentage point yoy to 43.15 per cent, as payment delays by retailers of general merchandise, food and beverages, as well as furniture and home furnishings fell.
Within the services sector, slow payments edged down 0.17 percentage point qoq and 0.55 percentage point yoy to 42.58 per cent, as payment delays by hotels and accommodation, health and consumer services dropped.
In the wholesale trade sector, slow payments fell 0.12 percentage point qoq and 0.14 percentage point yoy to 40.28 per cent. SCCB attributed this improvement to a decrease in both slow payments by wholesalers of durable and non-durable goods.
SCCB’s chief executive officer Audrey Chia noted: “The improvements in the retail, services and wholesale trade sectors have outweighed the slight decline in the construction and manufacturing sectors.”
She added that partial payments have also been on an uptrend for the past six consecutive quarters. “This is a sign of greater credit vigilance among firms in the recent months.”
Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms. Slow payment refers to less than 50 per cent of total bills being paid within the agreed terms. Partial payment refers to between 50 and 90 per cent of total bills being paid within the agreed payment terms.